Tianyin's 2008 Results Match Expectations

Tianyin Pharmaceutical Co. (TYNP.OB) released very positive full-year fiscal 2008 audited results, a year that ended June 30, 2008 for Tianyin. The company’s revenues grew 64% to $33.5 million while net income rose 51% to $6 million. The company reiterated that it expects a further increase in 2009 to at least $46 million in revenue and profit of $7.5 million. A few weeks ago, Tianying announced it expected 2008 numbers to hit these levels.

Gross margin jumped to 43.8% from 39.7% in 2007, though this remains below the industry average. The company cited its emphasis on higher margin products, such as Ginkgo Mihuan Oral Liquid and Arpu Shuangxin Oral Liquid, as the reason behind its gross margin improvement.

Costs were also higher in 2008, increasing a rate that was much higher than revenue growth. Operating expenses were $7.1 million, up 277%; SG&A climbed 281% to $6.9 million. Public market listing expenses contributed a small amount to the rise in costs, but the majority came from increases in advertising and sales force expenses.

Fully diluted earnings per share were $0.31, unchanged from 2007. There were 19.1 million shares outstanding at the end of fiscal 2008, up from 12.8 million shares at the end of 2007, a result of a financing that was completed in January 2008. Tianyin reported $12.1 million in cash on June 30, 2008. Days Outstanding in Accounts Receivable dipped to 49 days in 2008 compared to 56 days for 2007.

Tianyin is building a new manufacturing facility in Sichuan that will produce solid dose products. Construction began in July, and Tianyin expects production to being in January 2009. At a cost of $5 million, the new plant will increase Tianyin’s capacity by a factor of three. The company has also bought new machines that will raise production capacity by 15% in its current facilities. And it has signed contracting manufacturing agreements with two outside companies to provide it with greater manufacturing volume.

As reported last week, Tianyin expects to move its listing from the OTC Bulletin Board to the AMEX Exchange this week. It will begin trading under the symbol TPI on or before October 3, 2008.

Tianyin produces 33 modernized TCM products and 4 generic western medicines. The company has a pipeline of 48 additional pharmaceutical products pending approval.

Disclosure: none.